Phoenixville council votes to approve tax abatements, but school board cautious

PHOENIXVILLE — Borough council voted to create tax breaks in certain areas to foster development but will have to get approval from both Chester County and a somewhat cautious Phoenixville Area School Board to enact them.

The council voted Tuesday night to establish a Local Economic Revitalization Tax Assistance (LERTA) site at the old borough hall on Church Street and some vacant areas south of French Creek.

The old steel site is already a LERTA area.

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“The intent of the LERTA is to improve depressed properties that might not otherwise move forward,” Phoenixville Borough Manager Jean Krack said Tuesday.

When established, LERTA sites receive tax abatements to encourage growth of deteriorated areas, according to the York County Economic Alliance’s website. Improvements to the sites can be made without having to pay corresponding tax fees for, at most, 10 years. Each year after the improvements are made, the tax rate will increase proportionately to the time until the LERTA period is finished, when the site will pay its full assessed value on taxes.

Projects already “on the books,” like Madison at French Creek and the Shoppes at French Creek, would not be able to apply for LERTA, Krack said.

The Phoenixville Area School Board is approaching the establishment of LERTA sites cautiously. There is some concern among board members that freezing property taxes where they stand before development could potentially lead to an increase in students in the district without the tax revenue to back them up.

Phoenixville Area School District Director of Continuous Improvement Joe Antonio gave a report to the board on enrollment projections last month that showed heavy increases, especially in the elementary school levels over the next few years. That enrollment projection did not provide for any development spurred by LERTA areas.

“What I’ve heard, informally, is that the residential components are non-impactful,” school board President Josh Gould said in Thursday’s workshop meeting. “They are one-bedroom apartments for the most part. There are some two-bedrooms. You generally don’t see kids in one-bedroom apartments. It’s young professionals, for the most part.”

Emphasizing that information was “informal,” he said he still needed to speak further with the borough. A meeting between the school district and the borough is planned for Friday morning.

“We have asked them to come back to us and explain what this means to us,” said board member David Ziev.

“The really important questions are what the residential impacts are, ‘What do you think is the residential piece?’ because we really don’t care about residential tax abatements, and ‘How much of it is commercial?’” Gould said.

A commercial tax base is more valuable than a residential tax base because it has more money attached to it.

Drawing on experience from the committee half a decade ago, Gould said there likely will be residential projects mixed in with commercial because developers “want mixed use.”

Gould said a committee met five years ago to establish how best to attract more commercial entities within Phoenixville Area School District’s boundaries. The committee decided LERTA sites would benefit the district and some were established then between East Pikeland, Phoenixville and Schuylkill Township.

Since Phoenixville changed its zoning, some of those LERTA sites were impacted, Gould said Thursday. That zoning change also forced a re-establishment of the whole LERTA ordinance, Krack said Tuesday.

Krack said the borough will “gain in public improvements” through LERTA and he doesn’t anticipate “a problem” with the school district or the county.

Gould believes the borough wants the school board to vote next week, something he feels the board may not be ready for yet.

The school board wasn’t alone in being cautious about the LERTA sites.

“My concern is there’s going to be 200 homes and new students and you’re asking the school district not to tax that,” said Lisa Longo, a district parent and member of the school district’s Community Budget Advisory Committee, Tuesday night.

If the school district approved the proposed LERTA areas it would go to the county for approval.

About the Author

Frank Otto is a general assignment reporter covering Phoenixville, Limerick and Spring-Ford schools in addition to features and spot news. A graduate of the University of Wisconsin, Otto moonlights with the sports department on occasion. Reach the author at fotto@pottsmerc.com
or follow Frank on Twitter: @fottojourno.